3(16) Fiduciary Services

With us on your team, FinancialFocus 3(16) fiduciary services becomes the named fiduciary plan administrator. FinancialFocus 3(16) fiduciary services assumes the fiduciary responsibility for plan management and oversight of all plan administrator functions and operational issues.

Facts About Your 401(k) Plan

  • Company owners, CFO’s, and HR personnel are often considered plan fiduciaries.
  • Fiduciaries may be personally liable for any breach – there is no corporate veil of protection
  • Most companies mistakenly believe they have fulfilled their fiduciary duties by hiring a Third Party Admininistrator (TPA)
  • Your TPA may not be a fiduciary and therefore will not be held responsible for non-compliance and resulting penalties, fines, and restorations. You are liable for the results of their work

Did you know?

  • You are more likely than ever to be subject to a compliance review by the DOL
  • The DOL has increased their number of auditors by nearly 1,000 to more aggressively enforce 401(k) compliance
  • In addition to the DOL, employee complaints and inquiries are on the rise
  • In 2011, 233,780 employee inquiries resulted in $478.1M in fines and restorations.

Your Duties Before FinancialFocus 3(16) Fiduciary Services

  • Determine participant eligibility
  • Sendout enrollment packets including Summary Plan Description (SPD),404(c) Compliance Information, Qualified Default Investment Alternative(QDIA), and Explanation of Expenses
  • Comply with ERISA Section 2550.404(c) provisions for participant communication, including but not limited to:
    • Notice to participants of intention to comply with 404(c)
    • A description of investment alternatives available in the plan
    • General description of the investment objectives and risk and return characteristics of each alternative
    • Description of transaction fees and expenses that affect the participant’s account balance
    • Specified information regarding the plan fiduciaries
    • A description of the annual operating expenses of each designated investment alternative
    • Copies of prospectuses, financial statements, and reports provided to the plan
  • Address specific participant requests and/or instructions in compliance with 404(c)
  • Administer participant loans in compliance with statutory requirements
  • Send out Participant Termination packets
  • Administer distribution and rollover requests for terminated employees
  • Oversee annual census reconciliation with TPA
  • Review and validate compliance testing
  • Provide for annual audit of the plan
  • Oversee and manage process, in conjunction with TPA, for annual filing of Form 5500
  • Send out required year-end notices to participants 

Your Duties After FinancialFocus 3(16) Fiduciary Services

  • Submit 401(k) file each pay period
  • Deposit contributions on a timely basis
  • Provide final annual census and payroll data for testing and audit purposes
  • Provide interim census data for loans and distributions
  • Assist 3(16) with audit requests (if required)

FinancialFocus 3(16) fiduciary services provides the solutions you need to save time, maintain 401(k) compliance, and eliminate unnecessary risk for you and your business. We provide oversight, plan guidance and document execution, all backed by our 3(16) warranty.